Canadian house prices rose to $540,000 last month, up 15% in past year

The average price of a Canadian home that sold in February was C$540,000 (£315,000), a figure that rose by 15.2% in the previous 12 months, the group that represents 130,000 Canadian realtors (estate agents) says.

The Canadian Real Estate Association (CREA) said on 16 March that the number of sales rose also, by 5.9%. That's “one of the larger month-over-month gains of the past decade,” CREA said.

“Home prices are accelerating in markets where listings are in increasingly short supply, specifically in Ontario, Quebec and the Maritimes, which together account for about two-thirds of national sales activity,” added Jason Stephen, president of CREA.

However, CREA says the average figure can be misleading because it is skewed by sales of numerous expensive homes in Toronto and Vancouver. If those two cities are stripped out of the numbers, the average house price was C$410,000 during the month.

TD Bank economist Brian DePratto said that while the market appears to be strong, he notes that the figures are backwards looking. “February's gain points to solid underlying demand for housing. However, conditions changed significantly in March due to the spread COVID-19. As such, activity is likely to slow substantially in the near-term, if not retrench,” he reportedly said.